Question

1. a. Identify the tying and tied products in the Rik-Mik case.
b. Explain how Rik-Mik attempted to establish that Equilon had market power in the tying product.
2. How does Rik-Mik claim to have been harmed by the alleged tying arrangement?
3. Why did the Court reason that a franchising contract ordinarily cannot, by itself, be the basis for an antitrust claim?
4. Who won this case and why?
5. In recent years, Apple has been accused of tying violations both in the United States and in Europe. In brief, the plaintiffs are claiming that Apple’s software prevents music bought from Apple’s iTunes from being played on a player other than Apple’s iPod. The plaintiffs argue that Apple has monopoly power in the portable digital player market and the online music market and that it uses that power to force consumers to bundle the iPod and iTunes music. The result, the plaintiffs’ claim, is fewer options and higher prices. Do you share these concerns about Apple’s iPod/iTunes strategy? Explain.
6. When Late Night with David Letterman was an NBC show, the network, for some time, reportedly required those wanting to advertise on Late Night (then generally favored by a younger audience) to also buy spots on another talk show, the Tonight Show with Johnny Carson (then generally favored by an older audience).
a. Does that packaging constitute a tying arrangement?
b. Was it lawful? Explain.
7. Chrysler included the price of a sound system in the base price of its cars. Chrysler’s share of the auto market was 10 to 12 percent. Chrysler did not reveal the “subprice” for the sound systems. Independent audio dealers objected on antitrust grounds. Explain their claim. Decide.
Equilon Enterprises, LLC (“Equilon”) does business as Shell Oil Products. Equilon’s standard franchise agreement requires its franchisees, Shell and Texaco gasoline stations, to use Equilon to process credit- card transactions. In addition to payment for sales of petroleum products, Equilon allegedly gets (1) transaction fees associated with the processing, or (2) some kind of unspecified “kickback” from unidentified banks that process the transactions, or both.